What Are the Advantages of Ethical Investment in Energy?
Investment can be a tricky business at the best of times, especially when markets are volatile. Whilst an experienced investor can navigate the challenges associated with market volatility, however, the ethics of their investment can be a little more difficult.
With global warming becoming an increasingly potent, existential threat, some investors find it difficult to invest in companies which deal in fossil fuels. This is where ethical investment (investing in socially/environmentally responsible stocks and shares) comes in, so here are some of the advantages of this type of investment strategy in relation to renewables.
Standard Energy Stocks Volatile
Recently, the stocks and shares of some of the big players of the S&P 500 index like Exxon Mobil, Hess and Chesapeake Energy have been faring badly. In fact, the S&P 500 energy sector as a whole fell by 4.4%, showing just how volatile even the most prominent energy stocks can be.
This suggests that investing in renewable energy stocks is often no riskier than investing in regular energy stocks, which greatly strengthens the case for ethical investment in general. Renewable energy firms could well benefit from the recent volatility of S&P 500 energy sector if investors begin to switch to more ethical options.
Helps the Renewable Energy Industry Grow
With more money being pumped into renewable energy sources from ethical investors, the renewable energy industry has the chance to grow at a faster rate. This means that more jobs would likely be created in the sector, potentially allowing energy industry experts to move from non-renewable energy companies to positions in renewables companies.
With renewable energy companies flourishing around the world, top level wealth management staff could also start to recommend ethical investment as a more attractive option to their clients, further increasing its potential as an investment strategy.
Ethical Investment Opportunities are Growing
As global warming and the environment become an ever more prominent issue, governments and companies around the world are now taking their environmental impact seriously, and trying to make renewable energy a key focus in their policies/strategies.
This opens up more and more opportunities for investors and renewable energy companies to capitalise on the drive to halt global warming and create a more sustainable energy provision system.
The Renewables Industry is a Long Term Winner
Since fossil fuels will eventually run out, it makes sense that the companies which sell them will either have to start selling renewable energy or simply go bust. This means that, in the not-so-distant future, renewable energy sources will overtake fossil fuel energy sources (they are already well on their way).
So, renewable energy will almost certainly continue to grow as an industry, making investing in renewable energy stocks both a sensible and potentially lucrative choice. On the flipside, the fossil fuel industry will almost certainly decline in the coming years.
Ethical investment has a lot of potential when it comes to energy stocks and the energy industry. Not only does it help to protect the environment and create jobs the renewables sector, but it also has the chance to make the investor a lot of money in the long run, so it will no doubt continue to gain momentum as an investment strategy.